Income From House Property in case DLOP

Tax planning 1617 views 6 replies

Chinmay

Accounts Professional

356 Points Posted on 02 March 2023

Hi experts, I have one query regarding income from house property.

I have one person who has two houses in the same city, both properties having secured bank loans, and both EMI paid by the same person.

Property 1: Purchased on 26/01/2014 - 25,00,000 and EMI 18,000/- (total principle paid in year 24,000 and 192,000 paid in respect of interest)

Property 2: Purchased on 28/08/2022 - 65,00,000 and EMI 48,000/- (total principle paid in year 60,000 and 516,000 paid in respect of interest).

Now questions are:

1) Say, e.g. property 1 or 2 considers SOP, than other property interest can he be claimed as DLOP?

2) if yes, then how much

3) if not then how do you calculate his final house property income?

Replies (6)

sabyasachi mukherjee

Profession Business

28207 Points Posted on 02 March 2023

1. what is dlop

CA Raj Doshi

Practising CA

8954 Points Posted on 02 March 2023

As per amendment, 2 properties can be claimed as SOP.

1. Yes, if the person has only one self-occupied property (SOP), then he can claim the interest paid on the other property as Deduction from Income from House Property (DLOP). However, the maximum limit for DLOP is Rs. 2 lakhs per financial year, even if the actual interest paid is higher than that.
2. The maximum limit for DLOP is Rs. 2 lakhs per financial year, even if the actual interest paid is higher than that. Therefore, the person can claim a maximum deduction of Rs. 2 lakhs for the interest paid on the other property.

3. If both the properties are considered let out, then the final income from house property can be calculated as follows:

Gross Annual Value (GAV) = Higher of (Expected Rent or Actual Rent Received) Less: Municipal Taxes Paid Net Annual Value (NAV) = GAV - Municipal Taxes Paid Deductions Allowed:

Standard Deduction @ 30% of NAV
Interest Paid on Home Loan Net Income from House Property = NAV - (Standard Deduction + Interest on Home Loan)

Read more at: https://www.caclubindia.com/forum/income-from-house-property-in-case-dlop-597340.aspgeometry dash lite

Chinmay

Accounts Professional

356 Points Posted on 20 March 2023

I understand from you that max 2 L interest from a housing loan allowing to take tax credit by Income Tax incl. SOP and DLOP properties.

Chinmay

Accounts Professional

356 Points Posted on 20 March 2023

Originally posted by : sabyasachi mukherjee
	1. what is dlop

Deemed to be Let out Property

Chinmay

Accounts Professional

356 Points Posted on 20 March 2023

Originally posted by : Jones Derek
	1. Yes, if the person has only one self-occupied property (SOP), then he can claim the interest paid on the other property as Deduction from Income from House Property (DLOP). However, the maximum limit for DLOP is Rs. 2 lakhs per financial year, even if the actual interest paid is higher than that. 2. The maximum limit for DLOP is Rs. 2 lakhs per financial year, even if the actual interest paid is higher than that. Therefore, the person can claim a maximum deduction of Rs. 2 lakhs for the interest paid on the other property. 3. If both the properties are considered let out, then the final income from house property can be calculated as follows: Gross Annual Value (GAV) = Higher of (Expected Rent or Actual Rent Received) Less: Municipal Taxes Paid Net Annual Value (NAV) = GAV - Municipal Taxes Paid Deductions Allowed: Standard Deduction @ 30% of NAV Interest Paid on Home Loan Net Income from House Property = NAV - (Standard Deduction + Interest on Home Loan) Read more at: https://www.caclubindia.com/forum/income-from-house-property-in-case-dlop-597340.aspgeometry dash lite